Buoyant global trade and record-high commodity prices continue to underpin SA's healthy trade balances. But the government cannot rely on this as its sole source of economic dynamism.
An impressive recovery in global goods trade and an average 30% rise in commodity prices over the past year have provided a much-needed uplift for the South African economy at a time when good news has been in short supply.
Last week's news that the value of exports had risen to an all-time high in March encapsulated both the growing global demand for goods that require commodities as inputs and the escalation in their prices as a result.
The extent of the rally in commodity prices has been way ahead of most expectations and a surprise to market analysts. The IMF All Commodity Index has increased by 26.8% over the past year, copper prices have reached a 10-year high of more than $10,000 a tonne, palladium and iron ore reached all-time highs at one point last week and most other commodity prices are now above their pre-pandemic prices.
The tailwinds behind the much faster than expected recovery in commodity prices include the increasingly optimistic global growth forecasts and anticipated demand from the...